What’s the Impact of your Product Damages?

In Partnership with Pregis

Understanding the Impact

E-commerce retailers and manufacturers put in a significant amount of effort and investment making sure the products they produce meet quality and performance goals. However, if faulty packaging results in consumers receiving your product in damaged, broken and/or non-functioning condition, the impact to the bottom line can be significant. In fact, for larger retailers, the impact of damaged product to the bottom line can turn into millions of dollars. For a single return, hundreds of dollars in added costs can be easily incurred if every function and process was included in the calculation. Also, the loss of future orders based on a negative experience can add up to thousands of dollars per customer.

Why does this happen? When reviewing their protective packaging options, many companies tend to focus only on the cost of the packaging itself, missing the big picture. In addition to price, here are five key areas that each product manufacturer or fulfillment operation needs to understand when trying to minimize product damage and its resulting impact on profitability.

Inside the Impact of Packaging Damage


Companies know that when a consumer receives a damaged item, they must absorb the cost of not only shipping the product back, but also sending out a replacement item.

Product Replacement

When that product comes back damaged, you either need to dispose the product and send a different one as a replacement or you have to put in time, labor and parts to repair before sending out the same product.

Customer Service

Customer service personnel spend as little as 5 minutes on the phone (oftentimes much more) or online processing a return.

Packaging Supplies

Sending a replacement shipment to the consumer also means you will be paying twice for supplies

Customer Value

This is the most expensive part of the equation—the loss of customer lifetime value.

Ecommerce Considerations

Online marketing, specifically paying per click, is expensive when you take into consideration that conversion rates to acquire new customers are typically below 4%. These investments are not fully realized when customer lifetime value is reduced. It’s important to broaden your thinking to include this marketing expenditure when a customer is lost.

Ecommerce companies and manufacturers also can’t overlook the impact of social media on brand image and sales. According to the influencer marketing website Curalate, 92% of people are more likely to be influenced by their own social network than traditional marketing and advertising. As we have all witnessed, when someone has a negative customer experience, they tend to put it on social media. This means that in addition to the original customer not wanting to buy from the retailer again, their friends are now also significantly less likely to purchase from that company again.

How we help our customers eliminate damages

Through our decades of experience in the packaging industry, we have perfected keeping products safe in transit. Through our audit process we learn about what your products need to make it to your customer safely and efficiently. Too little packaging and improper packaging commonly leads to damage; too much packaging is a waste of money and is hard on the planet. We identify the right materials - and how much - to create a protected package every time. Our custom kitting and fulfillment solutions are designed to make your packaging process trainable and repeatable.

The Unboxing Experience

Another social media aspect is the growing inclusion of unboxing videos. Consumers contemplating a purchase are able to see in advance how the product arrives and how well it is protected—layer by layer. The environmental impact also cannot be ignored. Consumers increasingly want to do business with companies that have a positive environmental track record. If returned goods due to damages are forcing you to use 100% more shipping supplies and paying for three shipping trips instead of one, you aren’t only increasing your costs, but your carbon footprint, as well.

Let's Evaluate Your Damage Impact...

For an eye-opening experience, take some time to run through all six steps of the analysis above on your own damaged product returns. You are likely to be stunned as to how high the impact of each return is to your profitability. Selecting the right type of protective packaging solution for your specific product needs is critical to ensuring that you minimize—or even eliminate—damaged returns. Inviting a qualified protective packaging professional to provide a no-obligation audit is the first step to minimizing your returns and improving your company’s profitability

Contact us today to discuss how Morrisette can move your company forward.